Interview about operations of HIGHLAND FRESH DAIRY PRODUCTS:Sto Niño, El Salvador City, Misamis Oriental

Manager: Bismela M. Lancin

COMPANY BACKGROUND

Aside from Bukidnon and Misamis Oriental, the products reached as far as Misamis Occidental, Iligan City and Neighboring municipalities of Lanao del Norte, Marawi City and neighboring municipalities of Lanao del Sur, Agusan del Norte and Surigao del Norte. The company also serves requirements for white cheese and gouda cheese in Metro Manila.

Aside from Highland Fresh Milk Processing Plant, the company also operates two compact dairy farms in Manolo Fortich and Libona, Bukidnon where Holstein Friesian, Holstein Sahiwal, Jersey, and other dairy breeds of cow are raised. 

BRIEF HISTORY OF NMFDC

1988 - the Federation was first organized with 7 primary cooperatives as follows:
• Dalwangan Multipurpose Dairy Cooperative (DMDC)
• Manolo Fortich Dairy Cooperative (MFDC)
• Maluko Multipurpose Dairy Cooperative (MMDC)
• Villanueva Dairy Raisers MPC (VILDARAMCO)
• Kisolon-Impasug-ong Multiplurpose Dairy Cooperative (KisImpaMDC)
• Tagoloan Dairy Farmers MPC (TADAFCO)
• Cagayan de Oro-Opol-El Salvador Dairy MPC (COPEL)

• A total of 188 dairy farmer-members of all primary coop-member
• processing was more on household level
• products are only fresh milk in pouches

Nov. 20, 1991 – registered with Cooperative Development Authority with Reg. # 9520-
10003793
1992 - the Northern Mindanao Milk Processing Plant was first established by the then
including NMFDC. Philippine Dairy Corporation, the agency mandated to
provide legal support to local dairy producers

• NMFDC started operating the milk processing plant with:
  o Volume of production per day: 150 liters of raw milk
  o Manpower: 6 contractual

1995 - the Dairy Development Foundation of the Philippines granted the Federation a
rural cheese factory with funding from the Phil. Australian Community Assistance
Program (PACAP) to produce Gouda cheese. Dutch consultant came and
introduced Gouda processing.

Products sold include
o fresh milk in pouch
o choco milk in pouch
o mango milk in pouch
o milkbars
o gouda cheese

• Total Assets: P1.4M
• Manpower: 9 contractual

2000 – membership increased to nine (9) with the approval of membership of:
o Opol Dairy MPC (OPDAMCO)
o Lumbia United Farmers MPC (LUFARMCO)

• Volume of production daily: 250-300 liters
• Manpower: 18 (all regular)
• Products: fresh milk, choco milk, melon milk in bottle
   Milkbars in 6 flavors
   Gouda cheese
   Butter
   White cheese
   Lactoflan

2001 – acquired License to Operate from the Bureau of Food and Drugs with LTO #
RD11-RX-F-889

2004 – NMFDC started renting the milk processing plant from the National Dairy
Authority under a rent-to-own lease contract at more than P20,000 rental per
month for 18 years;

2006 – three (3) additional members:

• Talaba-Cogon-Kalabaylabay-Bolisong Dairy MPC (TACKBO)
• Maunlad Coco-based MPC (Maunlad)
• Allied Neighbors MPC (ALNEMCO)
• Volume of production: 1,000 liters daily

2009 – total assets: P13.6M

2010 – total assets: P14.574M

2011 – additional products: yogurt (plain and flavored)

• Marketing was enhanced through the activation of the Business committee
• Distributors increased from 8 to 32 individuals
• Marketing area of coverage include CARAGA region, Lanao Norte/Sur, Region 9, 12, Cebu
• Number of supermarkets where products were displayed increased
• Total Assets: P14M

2012 – product development was prioritized. Products developed include:
o Low-fat milk
o Non-fat milk
o Whip cream
o Butter

• the Federation granted a loan by DOST-X under its Small Enterprise Technology Upgrading (SETUP) through upgrading of equipment for cream, butter and mozzarella cheese production such as cream separator, butter churner, mozzarella stretching machine, big display chiller.
• Product labels and packaging were improved
• Marketing was enhanced which include high-end coffee shops
• Distributed more than P3M patronage refund and dividend to its members
• Acquired some production equipment for a more sanitized and efficient production
• Acquired farm lots in Bukidnon
• Owned and operated 2 dairy farms in Manolo Fortich and Libona
• Identified as one of the dairy multiplier farms of NDA
• Established an outlet in CDO
• Manpower: 18 regular, 6 contractual
• Net surplus increased by 235% from 2011
• Total net surplus: P5M
• Total Assets: P27.876M

2013 – market reachout include high-end coffee shops and bakeshops like J.Co Donuts, Krispy Kreme, Seattle’s Best Coffee, Coffeebean Tea Leaf, etc.

• Served 24/7 convenience outlets
• Awarded Best Regional SETUP Adoptor by DOST X
• Awarded Regional Gawad Saka Winner under the Agri-entrepreneur category
• Paid the National Dairy Authority full payment for the milk processing plant of which contract is supposed to end by 2022.
• Manpower: 24 regular; 12 contractual
• Net surplus: P12M
• Total assets: P38M

2014 - National Finalist, Gawad Saka

• National Winner, The Outstanding Farmer of the Philippines (TOFARM)
• Regional Winner, Gawad Saka under the Agri-entrepreneur category
• Net surplus: P4.8M
• 2nd DOST SETUP loan with production equipment such as in-line cream separator and pet bottle blowing machine was approved
• Granted approval for project under the Shared Service Facility Project of DTI for one (1) unit automatic bottling machine
• Established the Highland Fresh Barangay Food Terminal at the Plant Site, El Salvador City, Mis. Or., a grant from DA
• Approved one (1) membership as primary coop-member – United Livestock Raisers Coop (ULIRCO)
• New products line developed: sour cream, cream cheese, butter milk

1. Division of Work

Figure 1. Flowchart about the division of work and the processes involved in making a product.
Observation:

• The dairy products were delivered or picked up from the farm lands and readied for production.
• In the production of milk, the milk were received and checked by the quality production officer and production aide.
• The milk was then tested, weighed and filtered. The machine operator will the process the milk by homogenizing and pasteurizing.
• It will then be mixed by the machine operator.
• It will then cooled and after cooling the milk will the filled, sealed and labeled by the three machine operators.
• The milk was then stored by the warehouse man and is ready for selling.
• The dealers who will buy the products will be entertained by the releasing clerk of the plant and it will be checked by an inventory clerk.
• The products were then paid in the cashier and the products were then released by the warehouse man.

Conclusion:
Based on the facts that we have gathered, the company has divided the total work into several parts and employees were expected to perform tasks repetitively. Therefore, it can be concluded that the principle of division of work is performed meticulously.

1. Authority and Responsibility
   Observation:
   Question 1: Do you exercise the authority of your work? Do you have other personnel who will assign the authority for you?

Answer:
“As an operations manager, I only implement what are the policies that are formulated from the board. Whatever policies they will make, I will only implement and I will follow the policies but sometimes I have conflicts with the board because not all board members are business minded, since I have the experience in business, I know what is the management, I know what are my limitations so it will help me a lot. So, I only implement and the board will make the policies but the structure is that the board is not allowed to mandate a job for them but they are under my jurisdiction and I am under the jurisdiction from the board.”
Our Observation: The Manager was asked to give an opinion to the questions above and replied in favor of the principle as she has the authority to make decisions as mentioned above.
Conclusion:
Based on the manager’s interview, it is clearly stated that managers in this establishment have exercised authority as well as the responsibility regarding the work entrusted upon them. It can be said that the principle is implemented in this establishment. The manager is very sincere in obeying and implementing the policies.

1. Discipline
   Observation:
   Question: How do you deal with an employee who needs to be disciplined? Explain you strategy.
   Answer:
   “I can understand what their situations are, I deal with the situation in case to case and face to face with the employee. The code of conduct and ethical standards of employees were used and they are applied with a considerable punishment. I deal with them professionally, I will observe their welfare like for so many years their salary are the same, I will implement what is the ideal wage that they should have and I will give them benefits because they will be inspired of their work and they will be happy. They should be motivated and they can operate effectively.”
   Our Observation: The Manager was asked to give an opinion to the questions above and replied in favor of the principle as she has the methods in disciplining the employee as mentioned above. The company’s policies were confidential.
   Conclusion:
   Based on the manager’s interview, it is clearly stated that manager in this establishment have disciplined their employees. It can be said that the principle is implemented in this establishment. The manager is very adjustable and she will not implement the policies directly because she will first understand the situation and help her employees to cope with the problem.
2. Unity of Command
   Observation:
   Question: What do you do to prevent conflict when there is another superior/boss that gives orders/instruction to your employees? How do you manage and resolve conflicts?
   Answer:
   “There is a structure, like for me as an operations manager, my boss is the board itself. So under my jurisdiction is the production manager, quality control team, marketing team and etc., so they know what the areas they will work in. Like all the production people are under with the production manager but the production manager is under with me. As much as possible I do not want to directly reprimand the orders but I will refer it to the production manager. The company’s policies were applied in resolving a conflict.”
   Our Observation: The Manager was asked to give an opinion to the questions above and replied in favor of the principle as she follow the orders that is given to her and she respects her employees sincerely as mentioned above.
   Conclusion:
   Based on the manager’s interview, it is clearly stated that manager in this establishment is very considerate. It can be said that the principle is implemented in this establishment effectively. The manager has a deep respect in her employees to work as a team.
3. Unity of Direction
   Observation:
   Question: What is the key to developing a good team?
   Answer:
   “Respect is the very essential key! If you are in the top, if you want a good team or create a good team, you should respect the strength and weaknesses of your employees. If you know that that is his/her limit you should respect it. You should not be too bossy. You should support him/her maybe because he/she lacks training. Here in our company, we do multitasking, at the same time there is an alternation of work because if the employee is incapable to do his/her work because of other circumstances, the other employee will help. In creating a team, you need to know the individual capabilities in your employees, if he/she wants to improve, you should support him/her by training.”
   Our Observation: The Manager was asked to give an opinion to the questions above and replied in favor of the principle as she respects her employees in making a good team as mentioned above.
   Conclusion:
   Based on the manager’s interview, it is clearly stated that manager in this establishment is very respectful. It can be said that the principle is implemented in this establishment effectively.
4. Subordination of Individual Interest
   Observation:
   Question: How do you make sure that your employees are prioritizing first the organizational objectives rather than their own interests?
   Answer:
   “You cannot escape the hierarchy of needs, of course humans in order to survive, they have to deal with the economy. The “own interest” will begin because of the economic needs of a human. If he/she needs money, you should help them to address their economic needs. So, I’m sure that if you will help them in their economic needs, they will support the organization and the organizations’ objectives. “
   Our Observation: The Manager was asked to give an opinion to the questions above and replied the principle as she addresses first the root cause of the problem and apply the necessary problem to address the problem as mentioned above.
   Conclusion:
   Based on the manager’s interview, it is clearly stated that manager in this establishment is very effective in handling her employees. It can be said that the principle is implemented in this establishment effectively.
5. Remuneration
   Observation:
   Question:
   How do you keep your employees motivated in their work? Do you give them rewards? What kind of rewards?
   Answer:
   “Like I said earlier, to cope with their needs, the solution that I’ve made is to give them patronage refund in each employee. The patronage refund is high if the sales are high. Our employees are not only workers in the company but they are also part time dealers of our products. So, as a result they can earn their income more. The separate individual dealers were also rewarded by their patronage refund and every year based on their standing. If the employees will buy products from the company, they will have discounts in every product that they will buy.”
   Our Observation: The Manager was asked to give an opinion to the questions above and replied the principle as she said that in order to make their employees keep motivated, you should give them rewards as mentioned above.
   Conclusion:
   Based on the manager’s interview, it is clearly stated that manager in this establishment is grateful. It can be said that the principle is implemented in this establishment effectively.
6. The Degree of Centralization
   ORGANIZATIONAL STRUCTURE

Observation:
The general assembly of the organization has numerous branches namely: Audit and Inventory Committee, Board of Directors, and Election Committee. Under the Board of Directors is branched with the Credit Committee, Ethics Committee, Grievance & Mediation Committee, Treasurer, Secretary, and the Operations Manager. Under the Operations Manager is the Production Manager which will check the quality of the products and the processing of milk, Admin and Finance Manager, and Sales and Marketing. The Sales & and Marketing is composed of commercial, dealers, and their outlets.
Conclusion:
Based on the facts that we have gathered, the company has a very good degree of centralization that each aspects of the organization are focused in their work. Therefore, it can be concluded that the principle of the degree of centralization is balanced and applied made effectively.

1. Scalar Chain
   Observation:
   Based on the hierarchy of organization, the employees are under with different managers namely; Production Manager and Admin and Finance Manager and these are under with the Operations Manager. Whatever the issues or problems they can address it to their respective managers and the Operations Manager will manage the problem and issue or apply the specific task that what is needed to.
   Conclusion:
   Based on the facts that we have gathered, the company has a great division and they the scalar chain that they have is continuous and the problem that they will face can be resolved properly. Therefore, it can be concluded that the principle of scalar chain is applied thoroughly in the company.

1. Order
   Observation:
   Question:
   How do you maintain the organization of the company? (cleanliness, safety, and etc.)
   Answer:
   “The company is innovating. In partnership with the Northern Mindanao Federation, Department of Science and Technology, and Department of Agriculture, new machines were bought to accommodate the rise of demand of the products. The machines that are old were replaced to avoid any accidents. The cleanliness is maintained by our maintenance workers that ensure that every corner is clean in order for our products will not be contaminated”.
   Our Observation: The Manager was asked to give an answer to the questions above and replied the principle that the company is innovating to compensate the needs and safety for the company as mentioned above.
   Conclusion:
   Based on the manager’s interview, it is clearly stated that manager in this establishment is future oriented that she thinks ahead of time and address the needs of the company. It can be said that the principle is implemented in this establishment effectively.
2. Equity
   Question:
   Do you treat your employees equally? How did you make sure that they are respected by other employees?
   Answer:
   “Of course, I consider them as my capital, that’s what we call the human capital that if they are gone the company will not survive, so we should treat each other respectfully and professionally in order for the company to become better. In terms maintaining the morale of my employees, implementation of the right policies will be applied to those who commit the violation.”
   Our Observation: The Manager was asked to give an answer to the questions above and replied the principle that the employees were their main capital. They are the major contributors of what are the achievements of the company.
   Conclusion:
   Based on the manager’s interview, it is clearly stated that manager in this establishment is very professional in dealing with their employees. It can be said that the principle is implemented in this establishment effectively.
3. Stability of Tenure of Personnel
   Question:
   How do you make sure that the employees are very knowledgeable in their work? What will be then your strategy if there is an emergency happened in any employee?
   Answer:
   “First, in hiring employees, we have set of standards in hiring them. We will check their experiences or their records. If the employees are absent because of other factors, we have reserve employees that are trained in specific jobs to address the need of workers.”
   Our Observation: The Manager was asked to give an answer to the questions above and replied the principle that they ensure that if there is an emergency happened in any employee they have trained workers to substitute the said worker.

Conclusion:
Based on the manager’s interview, it is clearly stated that manager in this establishment is well equipped. It can be said that the principle is implemented in this establishment effectively.

1. Initiative
   Question:
   Are you initiative enough to foresee what are the needs of the company in the future? Do you make the opinions of your employees a legit opinion to address the company’s needs?
   Answer:
   “Yes, I can say that I’m initiative enough. I have plans that are followed every year to make the company better and improve more. The opinions of the employees are very important because I don’t everything in the company. They are the first hand workers so they know the problem more than me. So, I consider their opinions very legit and acceptable.”
   Our Observation: The Manager was asked to give an answer to the questions above and replied the principle that employees knows more about the solutions in improving the company because they are the first hand workers as mentioned.
   Conclusion:
   Based on the manager’s interview, it is clearly stated that manager in this establishment is open minded. It can be said that the principle is implemented in this establishment effectively.
   1. Esprit de Corps
      Question:
      How do you make sure that your company is united? Do you have activities that can enhance your unity?
      Answer:
      “We have many activities in order for us to stay united and we did not only develop ourselves physically but also mentally and spiritually. We have retreats in order for us to unwind from the work. We have outings in order for us to become more united and we always have a year-end party that the families of the employees are included.”
      Our Observation: The Manager was asked to give an answer to the questions above and replied the principle that they are not only focus on work alone but they relax sometimes in order for them to unwind as mentioned.
      Conclusion:
      Based on the manager’s interview, it is clearly stated that manager in this establishment is very caring that she knows when to relax, to help her employees develop and enjoy. It can be said that the principle is implemented in this establishment effectively.